Describe the operation of the Medicare program. Discuss who is covered under the program, how it is financed and the distinction between Part A and Part B of the program

What will be an ideal response?

Medicare was established in 1965 and provides health care benefits to over 40 million elderly Americans. The financing of the Medicare program depends upon the distinction between Part A and Part B of the program. Part A covers hospital care for the elderly and is financed through a payroll tax. Everyone who is eligible for Medicare receives Part A coverage. Part B covers physician care services and is financed through monthly premiums and federal government general fund revenues. Part B is voluntary and only those interested in coverage need make the monthly premiums to receive coverage. Because of the high subsidy out of general revenues, however, it is a good deal and thus most eligible individuals opt-in.